Retirement readiness remains one of the most pressing financial concerns for Americans across all age groups. As we navigate the economic landscape of 2025, understanding where you stand compared to your peers can provide valuable context for your retirement planning. The good news? According to Vanguard’s latest report, the average 401 (k) balance increased by 19% compared to last year, but what does this mean for you?
This article breaks down the latest data on retirement savings by age group, providing benchmarks that can help you assess your progress. While these figures are helpful reference points, they’re not verdicts on your financial future. Every individual’s circumstances, goals, and retirement needs are unique.
| Age Group/Generation | Average 401(k) Balance | Median 401(k) Balance |
|---|---|---|
| By Generation | ||
| Baby Boomers (1946-1964) | $249,300 | $88,488 |
| Gen X (1965-1980) | $192,300 | $60,763 |
| Millennials (1981-1996) | $67,300 | $35,537 |
| Gen Z (1997-2012) | $13,500 | $14,933 |
| By Age Group | ||
| People in their 60s | $573,624 | $210,724 |
| People in their 70s | $431,962 | $106,654 |
| People in their 80s | $393,826 | $86,301 |
| Data sources: Fidelity Investments (Q4 2024) and Empower reports. Note that average balances can be skewed by high-value outliers, which is why median balances (where available) are often lower. | ||
1. Understanding 401(k) Balances: Average vs. Median
The distinction between average and median figures is crucial when examining retirement savings statistics. Average balances can be significantly skewed by high-value outliers—a few savers with multi-million dollar accounts can dramatically inflate the average. Median balances, representing the middle point where half of the accounts are higher and half are lower, often provide a more realistic picture of typical savers.
Vanguard’s 2024 report showed that average 401(k) balances increased by 19% compared to the previous year, a positive indicator for retirement savers. However, median balances consistently fall well below the averages across all age groups, revealing a substantial disparity in retirement savings.
It’s also worth noting that these statistics only capture employer-sponsored plans. Many Americans maintain multiple retirement accounts, including IRAs, Roth accounts, and previous employer plans, meaning their total retirement savings may be distributed across several accounts, not captured in a single statistic.
2. The 2025 Contribution Limits: Standard, Catch-Up, and Super Catch-Up
The IRS has adjusted contribution limits for 2025, providing savers enhanced opportunities to build their retirement funds. The standard contribution limit for workers under 50 has increased to $23,500, up $500 from the previous year. Workers 50 and older can take advantage of the traditional catch-up contribution of $7,500, bringing their total allowable contribution to $31,000.
Perhaps the most significant change is the Secure 2.0 Act’s new “Super Catch-Up” provision. In 2025, workers aged 60 to 63 can contribute up to $34,750 to their 401(k)s, representing an unprecedented opportunity for late-career retirement savings acceleration.
Employer matching contributions add another layer of opportunity. According to Vanguard, the average employer match is 4.6% of pay, with the most common formula being 50% of employee contributions up to 6% of salary. This “free money” remains one of the most potent advantages of 401(k) participation.
3. Baby Boomers’ Retirement Savings: Where They Stand in 2025
Baby Boomers (born 1946-1964) have an average 401(k) balance of $249,300 and an average IRA balance of $257,002. These figures reflect decades of contribution potential, though they fall short of what many financial experts recommend for this stage of life.
The clock is ticking for Boomers who haven’t yet retired, but meaningful improvements are still possible. The catch-up contribution provisions are designed to help this demographic boost their savings in the final working years. Boomers who have already retired face different challenges—balancing withdrawal strategies to ensure their savings last throughout retirement while navigating required minimum distributions that begin at age 73.
The substantial gap between average and median balances in this age group highlights the uneven distribution of retirement readiness among older Americans.
4. Gen X 401(k) Balances: Mid-Career Saving Progress
Generation X (born 1965-1980) shows average 401(k) balances of $192,300 and average IRA balances of $103,952. This generation finds itself in its peak earning years, theoretically, the ideal time to accelerate retirement savings.
Financial experts typically recommend having approximately six times your annual salary saved for retirement by age 50. For many Gen Xers, current savings fall short of this benchmark. This generation often faces competing financial pressures, from helping children with education costs to caring for aging parents, creating a “sandwich” effect that can limit saving capacity.
Despite these challenges, Gen Xers have 10-25 working years ahead to substantially improve their retirement outlook, with time for compound growth to work in their favor.
5. Millennials and Retirement: Building Momentum
Millennials (born 1981-1996) have built average 401(k) balances of $67,300 and average IRA balances of $25,109. While these figures might seem modest compared to older generations, they represent significant progress for a generation still in the early to mid-career stages.
Financial experts suggest having approximately one times your annual salary saved by age 30 and three times by age 40. Many millennials are approaching these benchmarks, though student loan debt and housing affordability challenges have created headwinds for this generation’s saving efforts.
The substantial advantage millennials possess is time. With potentially 30+ years before retirement, consistent contributions and proper investment allocation can transform even modest current balances into substantial retirement funds through the power of compounding returns.
6. Gen Z Savers: Starting the Retirement Journey
Generation Z (born 1997-2012) has begun establishing retirement savings, with an average 401(k) balance of $13,500 and an average IRA balance of $6,672. While these numbers may seem small, they represent an impressive start for the youngest working generation.
The financial wisdom that applies most powerfully to Gen Z is simple: time is the greatest asset in retirement planning. A dollar invested in one’s twenties can potentially grow to many times its value by retirement age. For Gen Z, establishing the habit of retirement saving early—even with modest amounts—can prove more valuable than more enormous contributions started decades later.
Young workers face unique challenges, including establishing careers, paying off education debt, and navigating an uncertain economic landscape. Still, those prioritizing retirement savings from the beginning gain an enormous long-term advantage.
7. The 60s Decade: Peak Savings Years Before Retirement
Workers in their 60s have accumulated substantial retirement resources, with average 401(k) balances reaching $573,624. However, the median balance of $210,724 reveals the dramatic disparity among this age group. This substantial gap between average and median indicates that while some pre-retirees have amassed considerable savings, many others approach retirement with more modest resources.
The final years before retirement represent a critical accumulation phase. The new Super Catch-Up contribution limit for ages 60-63 provides a valuable opportunity to boost savings in these crucial years. These increased limits offer a partial remedy for those with inadequate savings, allowing for significant additional contributions during the final working years.
Workers in this age group also typically transition from growth-focused investment strategies toward more preservation-oriented approaches, balancing the need for continued growth with reduced risk tolerance as retirement approaches.
8. 70s and Beyond: How Retirement Affects 401(k) Balances
The data shows average 401(k) balances of $431,962 for people in their 70s and $393,826 for those in their 80s, with median balances of $106,654 and $86,301 respectively. The decline in average balances after retirement begins reflects the natural progression from the accumulation to the distribution phase.
At age 73, minimum distributions (RMDs) are required for traditional 401(k) and IRA accounts, requiring withdrawals based on life expectancy regardless of whether the funds are needed. These mandatory withdrawals and regular retirement spending naturally reduce account balances over time.
Effective withdrawal strategies become paramount in retirement, with the dual goals of maintaining a lifestyle and preserving savings for longevity. Healthcare costs, which often increase significantly in later years, can accelerate withdrawal rates and impact long-term account sustainability.
9. Are You Behind? Benchmarks for Each Age Group
Financial experts have developed general guidelines for retirement savings milestones by age. Standard benchmarks suggest saving approximately 1x your annual salary by age 30, 3x by age 40, 6x by age 50, and 8x by age 60.
According to the Bureau of Labor Statistics, average salaries for workers ages 25-34 are $57,564, $67,652 for workers ages 35-44, and $69,628 for workers ages 45-54. However, many Americans fall short of these targets.
However, these benchmarks are simply guidelines, not universal rules. Individual retirement needs vary dramatically based on desired lifestyle, geographic location, health status, debt levels, and other personal circumstances. Someone planning to retire in a high-cost area with extensive travel plans will need substantially more than someone retiring to a modest lifestyle in a low-cost region.
The most crucial factor isn’t how you compare to others but whether your savings trajectory will support your specific retirement vision.
10. Catch-Up Strategies: How to Boost Your 401(k) at Any Age
Practical strategies can improve your retirement outlook regardless of your current savings status. One of the most effective approaches is to increase your contribution percentage with each pay raise or promotion, allowing you to enhance savings without feeling the pinch in your monthly budget.
Taking full advantage of employer matching contributions remains an essential strategy—failing to capture this benefit equates to declining free money. The typical employer match of 4.6% of pay can add tens of thousands of dollars to your retirement balance over your career.
Appropriate investment allocation also plays a crucial role. While younger investors can typically afford more aggressive growth-oriented portfolios, those approaching retirement generally benefit from more balanced approaches that protect against market volatility while still providing growth potential.
For many savers, supplementing 401(k) contributions with IRAs, Health Savings Accounts (HSAs), and other tax-advantaged vehicles can provide additional retirement funding streams beyond workplace plans.
11. Beyond the 401(k): Total Retirement Savings Picture
Focusing solely on 401(k) balances provides an incomplete picture of retirement readiness. Many Americans maintain multiple retirement accounts, including IRAs created from rollovers of previous employer plans, Roth accounts, HSAs that can function as retirement vehicles, and taxable investment accounts earmarked for retirement.
The data from financial institutions like Fidelity and Vanguard can only capture account balances within their systems, potentially missing significant retirement assets held elsewhere. Some savers may have multiple 401(k) accounts from different employers, each with balances below the average but collectively forming a substantial retirement portfolio.
A comprehensive retirement planning approach considers all potential income sources, including workplace plans, personal savings, Social Security benefits, pensions if applicable, home equity, and even part-time work in retirement. This holistic view often reveals a more favorable retirement outlook than examining 401(k) balances in isolation.
12. 2025 Market Impact: How Investment Performance Affects Your Balance
Investment performance has dramatically influenced 401(k) balances in recent years. Vanguard’s 19% increase in average balances reflects ongoing contributions and market returns. Market performance can accelerate account growth during positive periods and create temporary setbacks during downturns.
The investment allocation within your 401(k) is crucial for growth potential and stability. While younger savers with longer time horizons can generally weather market volatility, those approaching retirement typically benefit from more conservative allocations that provide better stability.
Regular portfolio rebalancing helps maintain appropriate risk levels throughout your career, ensuring your investment strategy aligns with your changing time horizon and risk tolerance. As retirement approaches, gradual shifts toward more preservation-focused allocations can help protect your accumulated savings.
Conclusion
The 2025 401(k) balance data reveals encouraging progress and ongoing challenges in Americans’ retirement preparation. While average balances have increased across all age groups, significant disparities persist, with median balances substantially lower than averages.
The enhanced contribution limits for 2025, particularly the Super Catch-Up provision for ages 60-63, provide valuable opportunities to accelerate retirement savings, especially for those behind their target milestones.
Rather than viewing the average balances as definitive benchmarks, consider them reference points while focusing on your retirement goals. The most crucial factor isn’t how your balance compares to others but whether your savings trajectory will support the retirement lifestyle you envision.
Regardless of your current savings status, consistent contributions, appropriate investment allocation, and full utilization of employer matches can substantially improve your retirement outlook. By taking advantage of the opportunities available in 2025 and beyond, you can move closer to your retirement goals with each passing year.